The first generation of U.S. flood models was introduced into the market only last year. While barely up and running, their developers face serious challenges already as a result of the lack of good data, which is essential in carrying out accurate probabilistic modeling, since it enables a well-constructed and calibrated model to deliver results that match experience over the years.

Unfortunately for the re/insurance sector, even for mature perils such as Florida windstorm, the data is never entirely adequate. Worse still, in the U.S., flood data is almost non-existent. Making the job even tougher is that a model only works with all things being equal. If the severity or frequency of events is changing, modelers may feel their chances of hitting the mark are dwindling.